Factory output in fastest rise since 16 years

Manufacturing output rose for a sixth consecutive month in August, growing faster than expected to lift the annual rate to its highest in over 15 years, official data showed.

The figures, which come hours before the Bank of England announces its October monetary policy decision, may help ease fears that the recovery is faltering.

The central bank is widely expected to keep interest rates unchanged at 0.5 per cent, where they have been since March 2009, although this outcome is likely to mask a vigorous discussion among policymakers that may result in a 3-way policy split.

Manufacturing output rose 0.3 percent in August -- slightly above economists' forecasts for a monthly rise of 0.2 percent – taking the annual rate to 6.0 percent from 5.0 percent in July, the fastest rate of growth since December 1994.

The broader measure of industrial output, which includes energy production, showed a similar pattern.

Monthly industrial output growth held steady at 0.3 percent, in line with forecasts, and the annual rate jumped to 4.2 per cent – also its highest since 1994 – from 2.0 per cent in July.

The annual growth rate was flattered by comparison with a weak oil and gas output a year ago due to maintenance work.

The monthly increase in manufacturing output was driven by food, drink and tobacco, transport equipment and the "other manufacturing" category. However output in the paper, printing and publishing, textiles and machinery and equipment sectors fell.